Oracle rejects Brussels antitrust claims

Oracle on Monday mounted a strident attack on Europe’s competition authorities as it confirmed that it had received an official objection from Brussels to its proposed $7.4bn acquisition of Sun Microsystems.

The US software company also said it would “vigorously oppose” the European Commission’s position, pointing to further lengthy delays even if a deal for the struggling Sun is finally cleared.

By formulating an official statement of objections, which has been sent to Oracle and not made public, regulators in Brussels have drawn a line in the sand more than two months after first revealing they might have concerns. A formal objection is the first step towards possible action to block a deal, though few disputes get this far and most are resolved by the companies either modifying their plans or scrapping their proposals.

Oracle said the Commission’s case “reveals a profound misunderstanding” of the software markets, and that a deal of this kind had not been blocked on either side of the Atlantic “in decades”.

European regulators object to Oracle assuming control of MySQL, an open source database company bought last year by Sun. Though MySQL is far smaller than database market leaders Oracle, IBM and Microsoft, critics say that Oracle would have an incentive to suppress a product that is given away for free and poses a disruptive threat to its own core business.

In a statement on Monday, however, Oracle claimed the case was founded on a misunderstanding. “It is well understood by those knowledgeable about open source software that because MySQL is open source, it cannot be controlled by anyone,” it said. “That is the whole point of open source.”

The case has led to a rare difference of opinion between anti-trust regulators on either side of the Atlantic, with the US Department of Justice clearing the transaction in August.

In an unusual move, the Department of Justice issued its own statement on Monday reiterating its view that the proposed deal does not give rise to anti-trust concerns. Molly Boast, deputy assistant attorney in the anti-trust division, said it had concluded that “consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products.”